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tv   Closing Bell  CNBC  October 16, 2009 3:00pm-4:00pm EDT

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we're getting down to the closing bell. the final hour of trade. we'll see if the level can hold or not as we go into the weekend. have a wonderful weekend. we're going to have more from charlie gasparino with the bank of america/merrill lynch. we'll hand it off to our friends now on cb. and there it is, the latest picture, another perp walk on wall street. one of america's wealthiest men, among six people arrested by federal authorities as part of a
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hedge fund inside a trading case. another black eye for the industry. will it be a wakeup call for wall street? we will look at the ripple effect on the "closing bell" as we enter the final and most important hour of the trading day. hi, everybody, welcome to the "closing bell." i'm maria bartiromo at pace university in new york city. over the next two hours i'll be speaking with some of the most influential people in business about the future of capitalism, as well as the economy today. in the next hour of this special edition of "closing bell," one of the most influential decisionmakers in the financial world. my exclusive interview coming up with treasury secretary timothy geithner. first, take a look at where we stand on stocks right now. we've seen selling under way for the markets. and it is off of the worst levels of the session, certainly. below 10,000, with a decline of about 69 points. financials leading the market lower as the leadership group
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9994 on the dow industrials. nasdaq at 2 # 5. you can see the interday chart is off of the worst levels of the afternoon. bucking an otherwise weak trend for stocks. s&p 500 down about nine points. 3/4 of 1%. at 1,087. joining me, bob pisani on the floor of the nyse. bob, how does it feel to you in terms of performance as well as volume on this friday afternoon? >> volume is going to pick up because it's an options expiration day. other than that, it's similar to the last couple of days, where you get sell on the news, stocks have a big run-up, bismt, ge and bank of america sell off on their earnings. there is a little bit of a trend i'm discerning from the companies. two trends that i am hearing. number one, u.s. and europe are bottoming, but don't seem to be roaring back in any way, but
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asia, clearly coming out of the recession. that's going to be the issue. are we going to hear more of this? we're going to need a little more positive commentary on u.s. and europe to really move the markets forward. the good news is, i hear lean inventories everywhere. you want to watch the stock next week to watch, watch caterpillar. here's one of the classically multinaeshl corporations out there. they'll certainly talk about how asia is doing, as well as whether or not the u.s. has been bottoming. the inventories on kiter pillar, what i hear, extremely lean out there. they're going to have to increase production regardless of what happens. look at the big dow earners today. these stocks have all been down throughout the day. but sideways action a little disappointing on the top line. ibm generally good numbers and the commentary was pretty good. remember, big moves here. ge was 40% on the upside in the third quarter. next week, all three of these banks will be reporting. you'll hear a lot about the regionals and problems with
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commercial real estate. that will also be a major topic for the next week. what's strong on a day like today? usually you get the consumer stocks to the upside. the classic move for 2% or 3% move, craft, kroger, as well as safeway. let's go around the horn to talk to all my friends. we start with scott wapner at the nasdaq. >> bob, thanks so much. off the worst levels of the day, down about two-thirds of a percent. clearly the story is about google. the stock is sitting at another 52-week high, up 4%. pretty good outlook by eric schmidt, the ceo there. elsewhere in large cap technology today, microsoft is weaker, as is research in motion. dell is weaker, too. in fact, if you want to talk about a big week coming up, next week is the week. the companies among widely held mostly large cap technology stocks that are going to be reporting earnings. monday, apple. that's big. you've got tuesday, sandisk, which sells chips and a lot of
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gadgets. yahoo! tuesday. wednesday, ebay. thursday, amazon. friday, microsoft. judgment week perhaps for technology. we'll follow it all here on cnbc, you know that. finally, let's talk about an ipo, cric, a lot of the ipos of late haven't done that well. this one is doing well. up 17.5%. the stock is trading just north of $14. let's go to sharon at the nymex. >> scott, i'm going to take it from you, because we have breaking news right now. we have more information on the investigation of bank of america, surroundinge merrill lynch ak which sifgs. let's get to charlie gasparino right now. >> it's kind of interesting. i wasn't in the room, but some of the tidbits i'm getting, they're essentially blaming this on legal counsel. i don't know if that's going to work. they were say this was a crazy time in the markets. we relied on legal counsel and they told us what to do
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essentially. that's their story, they're sticking to it. they spoke to cuomo and the s.e.c. today. we'll get more as the day goes on. that's essentially their story. that these were significant problems in the market. kind of interesting, they said merrill's $15 billion loss would have been significantly higher if it weren't for one-time gains. they said those losses picked up after the shareholder vote. and all along, they were relying on lawyers. there you have it. that's their side of the story. we've got to hear what happens from cuomo's office. does he buy this story? does towns buy this story? does the s.e.c. buy the story? but they're basically saying, we relied on lawyers, this was a crazy time, and basically everything that ken lewis said is backed up in these documents that they handed out. they did put together a chronology. i have it right here. we're kind of laying out the crazy time and when everything happened and when they had these discussions. we'll have to see exactly, did the investigators to cuomo's office buy the arguments.
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but that's it, they relied on lawyers and they're sticking to that story. >> of course they relied on lawyers, right, charlie? of course they had legal advice surrounding this deal. yeah, they had legal advice on this. obviously, right? >> right. i think what they're saying is, like, listen, look at our e-mails. beach the way, they did turn over the e-mails from inside counsel, and their outside counsel. they put them in some sort of chronological order. they kind of laid it out in a presentation made to cuomo's office, to townsend's office, to the s.e.c. they're saying, if you look at these e-mails, there is nothing inconsistent from these e-mails from what we've said. losses accelerated after the shareholder vote. december 5. the losses were significant. this is interesting that i find fascinating, that they're actually saying merrill posted a $15 billion loss, they knew about that loss after the shareholder vote. but if it weren't twor two one-time gains, it would have been larger. can you imagine that, larger
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than $15 billion? that's amazing to me. >> extraordinary numbers. charlie, thanks. as always, great reporting. charlie gasparino. we've got rick santelli looking at the trading on wall street today. let's go to chicago and rick. >> this week has been an interesting week for treasuries. you can see by the chart of tens, we're up three, four basis points. but intraday, we've come very close this week to 3.50 yield. we haven't had that close since the 21st of august. there's only $3 billion left in treasury buyback. that's a dynamic to pay attention to for next week. the next chart, this is the lqd, etf for investment-grade xorts. the reason i'm showing the six-month chart is many believe this has turned. this has implications. the extra yield in corporates have been the darlings in investors. is that all there is? we'll have to monitor this.
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the last chart, of course, everybody, especially commodity charters following the dollar. we've had a little reprieve in terms of not making a new 14-month fresh low today. what we really want to pay attention to is how some commodities like gold will behave next week, should the dollar stabilize even at very low levels. maria, back to you. >> rick, thanks very much. meanwhile, home prices may be on the rebound after the case schiler index showed an unprecedented reversal from negative to positive growth in the summer months. my next guest is cautioning we're in uncharted territory right now. there is a danger, another bubble could form. robert schiler is with me, professor at the yale school of management and co-founder of macro markets. glad to have you on the program. >> my pleasure. >> why have you been surprised about this turn-around? and i want to get into the idea of possibility of another bubble forming. >> right. well, we have learned from our research that home prices are
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very smooth through times. they go in the same direction. home prices were falling for almost three years. every month they were going down. and that's been a pattern, because it's not an efficient market. it's not a quickly liquid market. so when we see it go from minus 4.8% in the preceding three months to plus #.6%, you've never seen anything like that before. >> is it possible that we see the first time home buyer credit have anything to do with it? a lot of people talking about the stimulus coming out of the government is very much a temporary phenomenon. we saw it with cash for clunkers. >> right. >> auto sales went from horrible to great to horrible when the cash for clunkers program was over. so what happens when that home buyer credit goes away? >> the thing is, i don't know that it's just the home buyer credit. because we're seeing other signs around the same time as the stock market. the stock market made practically a record turn-around at the same time.
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it seems to me that it's not just the $8,000 tax, it's also a really major reversal of confidence. and that's what makes me wonder that it could really be a major turning point. >> now, a turning point meaning that the market has turned, things are better, and -- >> the whole -- everything's getting better. the confidence is going up. >> that's huge. that's really good news. >> i'm saying probably not. makes me wonder. >> here you go again. you make me worry. let me ask you about the bubble. which bubbles could be forming right now? it's hard to know when you're in a bubble, but what do you think? >> the funny thing about the recent experiences, we saw bubbles in a lot of things, in the stock market, housing market, oil market. gemly energy market. they all collapsed. not exactly at the same time, but at similar times. that is a very unusual circumstance. i don't see likely it happening right around now. it's something that it looks -- i look at the data and i think
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it might be happening. because it's such a sudden turn-around. but my instincts say no. >> what about around the country looking at various regions where we actually did have strength, and things got so overheated. is there a case to be made that those are the areas that rebound first or not? well, not at the moment. the places that were the most overheated, like las vegas or phoenix, are still doing badly. on the other hand, california is really coming back. and in a sense, maybe that is to be expected. because california is traditionally a very speculative, volatile state. californians that are talked to are ready for another gloom anyday now. >> sure. they would like -- the ious, i guess. >> they make it happen. there's something aboutmand creating bubbles. that's a problem. it's a social epidemic. hard to predict. >> we're an optimistic society. whenever we're in a period of euphoria, we believe it.
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how much longer can you expect mortgage rates to remain this low, in your view? >> well, it depends on the general interest rate outlook. it depends on the support. the fed is still buying up mortgage -- you know, fannie and freddie mortgage assets. they said they'll extend that into next year. but when that stops, if it does stop, that's when we might see a major change in the market. >> bob, great to have you on the program. we so appreciate it. thank you very much. we'll see you soon. we've got about 45 minutes before the closing bell sounds on wall street. a market is under selling pressure. the dow down about 60 points. bob, nasdaq composite weaker by 13. but still up on the week. wall street another black yif. we'll discuss the ripple effects for wall street and what kind of additional scrutiny may come from washington, maria. after the bell, my exclusive interview, unedited with treasury secretary tim geithner. find out if he thinks there is
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enough capital in the system now. what will happen to the economy once the stimulus money runs out. and how about taxes in 2010. first, take a look at the most active stocks on the new york stock exchange. remember, it's a law, citigroup always number one, bank of america number two. not long ago, this man had limited mobility.
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welcome back. one of america's richest men, and founder of hedge fund firm gallion group has been charged with conspiracy and securities fraud as part of an inside trading scheme. bertha coombs is following the story. she has the latest details right now. >> the $20 million scheme may not sound like a lot, but for a lot of people on wall street this afternoon this is a very big deal. federal investigators say gallion group leader suspected he was under investigation and booked a flight yesterday to fly to london today. instead, the billionaire hedge fund director's travels find him in federal court this afternoon, facing eight counts of securities fraud in connection with the largest hedge fund insider trading case ever filed.
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investigators say wiretaps put roger at the center of a web of trading and material information. that may have only netted $20 million, but involved high insiders trading on non-public information about big name companies like google, amd and hilton. u.s. attorney barra said most cases are notoriously difficult to prosecute, but in this case investigators obtained several wiretaps and have text messages passing realtime about material information. and he warns his office is going after insider traders in the same way it does organized crime rings. >> it should be a wakeup call for every hedge fund manager, and every wall street trader, and every corporate executive who is even thinking of engaging in insider trading. as the dechts in this indication have now learned the hard way, they have revealed a lot of confidential information, but there was one secret they did and that is that we were
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listening. >> galleon issued a statement this afternoon saying the firm was shocked to learn of raj's arrest and had no prior knowledge of the investigation adding it will cooperate fully with authorities. in the meantime, galleon remains highly liquid. raj was at the center of the firm's tech funds. a lot of his co-defendants come from big name firms. danielle chies irks of new castle at bear stearns. rajiv goel, works in intel treasury. they say he has been placed on administrative leave pending investigation. robert moffat of ibm. and anily kumar. this afternoon, the big question is going to be whether there will be bail for raj, given allegations that he made plans to leave the country today. >> pretty amazing story. thanks very much, bertha coombs
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with the latest there. over to bob. sglmplgs maria, this latest scandal is not going to help quiet anger at wall street over a number of high-profile problems, including outrage over compensation and the ongoing trial of two former bear stearns hedge fund managers. there's another black eye for wall street, meaning more regulation is on the way. vince, you know him, and chief investment officer, and my friend tyler matheson. vince, clearly the government was embarrassed by the madoff scandal. they're coming down rather heavy here. does this mean more regulation is in store for hedge funds? >> i don't see any way around it. i think you put it very well, it's just another black eye. of course, he has his day in court to come yet, but it comes at such a time you kind of pile the bad news on. the inevitable result as people say, you've got to regulate it more. although regulation wouldn't have helped this, but you still want to regulate it more. >> tyler, what about that? regulation will not help this particular case.
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it's an ethical issue, not a regulatory issue. this guy did this just with a cell phone, right? >> here the laws were such you didn't need new laws to prosecute this particular case. >> exactly. >> but it has certainly been a rough week on wall street amid what generally are perceived to be pretty good profits on wall street. as you mentioned, you've got the stories earlier in the "wall street journal" that wall street is about to set aside the major banks, $140 billion to pay the very same people who brought the system arguably to the brink of the abyss about a year ago. i think it is just natural, human and a political response in washington that an awful lot of people are going to want to say, stick it to these guys. because we knew the game was corrupt all along. here's more evidence of it. they haven't learned a lesson. so congress, teach them a lesson. that usually results in bad regulation, not enlightened regulation. >> i couldn't agree more. the things you cannot legislate
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morality, but they'll try to do it. inuth ble if somebody's going to cheat, they'll find a way around the system. >> vince, do you think this could lead to another wave of redemption similar to what we saw right after madoff? >> no, i do not. i'm watching the market action today and the market's better now after the news broke than it it was on the opening this morning. which i think is a normal setback after good news. i think perhaps this is being viewed as one off. if not a one off, people who accept the fact that there are people that will take advantage of the system. so no, i don't expect a wave of redemption on this. >> what do you think will happen as a result of it? for example, galleon will probably face some kind of redemption. certainly could not be good news for them. >> galleon is a pool of a lot of different funds. this guy, if guilty, did his co-workers as wrong as he did us. but the funds that manage the non-tech sector probably will be fine. although you figure that the individual fund that he managed
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might be under attack, and his positions are public knowledge. you can look on the network to find out what they are. people will try to gain the system in going against that. i would think galleon could get by this. >> vince, you know a lot more about this than i do, but my suspicion would be, it would be very difficult for investors, or let's say a pension fund or some fund that has money in galleon to go back to their folks and say, yeah, we've got money in a fund where allegedly a crime took place. and that that would cause them to withdraw money. i don't know. you probably have a better insight on this than i do. but it would be very difficult for anybody with any public money to keep money in that company. >> tyler, you make a good point. let's call it the marketing challenge of trying to get trust from the other. >> tyler, i don't know how you feel, i struggle with this issue of regulation on wall street. obviously we need to do something here. yet you can strangle these companies just as easily.
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hedge funds, whenever i talk to them, are terrified of being forced to public what their holdings are in some kind of public site which has been proposed before. they say this belongs to their investors. how do we find the right balance here, tyler, that's going to apiece the public and protect private interests? >> i wish i knew. i think you have to bring the principals into the process. and try and understand the business models, the products that are being sold, in a way that i suspect many people in congress do not understand. and so we get reactions from washington that sometimes are out of proportion, or based on a fundamental misunderstanding of the business models, and how things operate. we get reactions such as a special pay master, and i don't mean to take the conversation off in a different direction, and yet i do, a special may master intervening and saying to ken lewis, you don't deserve to be paid here. and exerting that kind of,
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really rather unilateral power. right or wrong, that's the kind of blunt instrument force that sometimes can result from these kinds of situations. >> that's what you want to avoid, legislation in haste. because you'll pay it over a long period of time. as you say, get the people inside the tent and try and arrive at what's best for everybody involved. because these funds serve a very vital liquidity purpose in the marketplace. >> we've got to go. but vince, any quick thoughts on who the fbi's confidence al witness is? that's what everybody wants to know down here on the street. >> that's going to be wall street 3, the movie. >> vince and tyler, thanks very much to both of you. what can be done to restore confidence? we've got about 40 minutes to go before the closing bell here. dow jones industrial average well off its lows. i see boeing up nicely. they said that plane of theirs will be flying by the end of the year. some of the other big names also on the upside from the downside.
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maria? >> and bob, up next, we've got an exclusive interview with the chairman and ceo of pfizer, jeffrey kindler. we'll talk about what the drugmaker is doing post the acquisition with wyatt. the deal closed yesterday. we'll also get his take on the health care debate around the country. stay with us. we'll talk innovation as well with jeff kindler coming up.
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welcome back. pfizer and wyatt in their first full day of operations since their deal closed yesterday. early this morning i sat down with pfizer chairman and ceo jeffrey kindler. i asked him what comes next for the business and shareholders. tell me how important this deal is for pfizer, and what it will do for earnings over the near and longer term. >> it puts us in a really strong position to provide medical and health care solutions to patients from, everything from neonatal vitamins to infant formula, to vaccines, all the way to alzheimer's treatments. and to your question to deliver strong stable and consistent earnings, and top buying growth into the future. >> some people were disappoint you had to cut the dividend in order to finance this wyatt deal. any chance it goes higher
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anytime soon? >> we'll be talking about that as we always do in december. but we have a lot of opportunities to deploy capital on behalf of the company, whether it be dividends, buybacks, investing in the business and growth opportunities. and we'll be deploying our capital with great regard for the future of our company, as well as the importance of providing a good return for our shareholders. >> what's the most important thing in the pipeline right now in terms of your profitability? >> we have terrific new potential treatments for alzheimer's disease, for oncology, for pain, for rheumatoid arthritis. we're very excited about the combined pipeline, as well as in the vaccines area which will be an entirely new opportunity for pfizer. and wieth brings us a platform in by oh logics. >> we're still in sort of a slow period. how does it look to you? >> well, in the -- outside the united states we're seeing some
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improvement. and some great opportunities particularly in the emerging markets. i'd say in the united states, i certainly feel as though the worst is behind us, and things are stabilizing. but we still see the effects of unemployment. and, you know, we think the recession certainly is behind us. but we still have challenges ahead. >> it seems we're already heading down this road of managed care, having more pricing power than it already does in terms of driving market share. does that change the way you operate? >> that's been going on for several years, and it certainly has changed the way we operate. in the united states in particular. because the managed care organizations in the insurance companies do exercise a great deal of authority over the decisions for patients and physicians regarding which medicines they use. and so we engage very completely with the insurance companies in showing the value and benefits of our medicine. >> let me ask you, some analysts are saying, look, if you look at
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your last two mega deals, you really didn't see the substantial cost synergies that some people expected. and now you're doing a third deal. how is wyeth any different? >> this deal is quite a bit different. those deals were primarily focused on the value bringing in very, very important products. after all, warner lambert brought us lipitor. the pharmacia brought us various products. it brings with it some very, very important medicines. it's not about a single medicine and it's not about cost cutting alone. although there will certainly be significant synergies as we've discussed. but ha this deal is really about is transforming our business from one that was highly dependent on a few blockbusters, highly focused on the primary care, chronic care business, highly focused on the developed world into a business that's very diverse.
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we're going to be in nine businesses around the world. we're in primary and specialty and animal care, human care and consumer care. and nutrition. in capsule manufacturing. and wyeth combined with pfizer gives us a platform in vaccines and biologics and a transformational deal that is strategic. it brings synergies and cost cutting, but it's about bringing a platform to customers all around the world in different markets and different situations. a platform for long-term shareholder value creation. >> do you still feel confident that innovation is alive and well in america? do you worry that we are actually walking on thin ice as it relates to pressures, in terms of innovation and advancements? and how important is technology in your business? >> first of all, i have fundamental optimism and enthusiasm for the innovative and entrepreneurial spirit of
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the american people. and i'll bet on that any day of the week. in the long run, i'm confident in the innovative spirit and ability of americans to go head-to-head competitively and entrepreneurially with anybody in the world. that having been said, i certainly would like to see a greater focus today on the part of government, business and labor, all working together on an innovative agenda for our country. but i do think we're at a stage now where we have to come together as a country, in a good partnership between the business community and labor community to set forth a strong innovation agenda for this country in order to ensure the government policies, business conduct and labor policies work together to create an environment in which innovation can thrive. that is happening in other countries, both in europe and in asia, and to put that great american spirit of innovation to work in the best possible way, we need to create government and private sector policies that will encourage it.
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>> so incentives and practices that encourage businesses to thak those risks? >> absolutely. but it's not just the government. government has to work together with the private sector and with the labor movement and with other elements of society together to work on the best public/private partnerships to do that. that's where we'll be most successful. >> my thanks to jeff kindler at pfizer. now, pfizer is now in the process of determining which offices and corporate sites will remain open. pfizer and wyeth now operations in pennsylvania, new jersey and connecticut. more on that story as it develops. the markets, well, we are just about 30 minutes before the closing bell. dow industrials down about 50 points. we approach the close. higher for the week. >> that's right. we're coming off the lows. in fact, we're at the highest points of the day and still positive for the week, maria. financials pulling back after a disappointing earnings report from bank of america. 
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a take on the market, let's turn to the web cam connection straight from new york city this time. lucas, the dollar coming off the lows here. we're still at 52-week lows on
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the dollar. what's going to happen next? >> i'm not really expecting any huge rallies of the dollar. i just saw a headline cross the tape where the u.s. budget deficit reached record highs yet again. as long as we keep printing money and spending money, you can assume the dollar will kind of gradually move lower. >> what about the financials? all throughout the week here, we were in and out in that, we were higher earlier in the week, weaker today on bank of america's disappointing numbers. goldman was great, jpmorgan great as well. what will happen next? >> you see a lot of firms that are really leveraged to the capital markets. fairly good quarters, some of them fairly exceptional. but when you look at some of the firms leveraged to wall street, to use the expression, there's still a lot of problems there. >> that's a good point. the big thing on bank of america is, do you believe in the improving credit quality story? if you do, you certainly want to
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own them. if you don't, believe that story, you don't want to own them. what will happen here on the credit issue? >> if you just go forward, barng of america probably can't take any more losses than they've already taken. even if their business isn't that much better, they're still running at a better loss rate than they were previously. >> next week we're going to get a lot of the regional banks. we'll see wells fargo, zion, key corp, those stocks we know have got issues with commercial real estate. so in a sense, isn't it like the best companies have already reported with the best news? i mean, jpmorgan and goldman? >> that's an interesting point. because of that, i think you need to be cautious on that group from this point out. >> what particular sectors do you like? >> right now we're really looking at the oil sector. oil has broken out. the products led it higher. we're looking at fertilizers. there's interesting news in the potash space which could drive
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those stocks. they've been really laggard. we're putting money to work in if you look forward, you'll see significantly positive earning trends. >> 12% move in energy in the last, like seven or eight days. this group's been up every single day for the last seven or eight sessions. lucas, we've got to go. thanks very much. >> maria? well, bob, we're in countdown mode here. this market is improving. a decline on the dow about 40 points. way up off the lows. real winners as well. nasdaq composite also in the red for the week. the markets are ending higher. >> actually at the highs for the day, believe it or not. the president of standard and poor's says what kind of regulatory reforms will take place. my exclusive onan woun interview with timothy geithner. find out if he's encouraging more banks to start paying back
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the t.a.r.p. money. based on my conversation, i believe he is definitely encouraging that. we're also going to talk about whether or not he wants to extend that t.a.r.p. program past the deadline. all coming up 4:00 p.m. eastern.
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welcome back. we're coming to you today from the buttonwood gathering, in new york city at pace university. and restoring trust in the financial system. it's certainly a key topic here at the buttonwood conference. the rating agencies look to improve performance and prevent another financial fallout. joining me to talk more about that is the president of standard and poor's, the world's largest credit rating company. joins us now in a "first on cnbc" interview. as you look back to what has occurred in the last year and a half, do you think that the ratings agencies were part of sort of the confusion in terms of what went wrong? >> well, clearly we are a player
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in the marketplace and providing an independent benchmark on credit risk. and part of the capital markets, particularly in the mortgage basically, was a disappointment for everybody, including us. >> sure. >> and so, you know, there are things we have learned. we've reflected and been making a lot of changes around that. >> i want to ask you about the changes and really the financial reforms that you're expecting. but first, you're about to be on a panel in the next hour about restoring trust and confidence in the market. how do you do that? >> i think confidence is the life blood of the financial markets. without that, recovery is going to be very difficult. and i think bringing that back is very important. the best place to start with this, say what brings confidence for the investors. it's really transparency, integrity in the process, commitments, that people need the commitments, the promise they will do, and stability in the market place. those are the very important elements that bring confidence. and i think we all need to work collectively, regulators,
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policymakers and participants to bring confidence back. >> for sure. so we've got expectations now of financial reform. what would you like to see that reform look like once it does materialize? what specific changes are you expecting to come out of it? >> i think the important parts of the regulatory reform as we see it is focus on transparency, which is very important to bring confidence back. secondly it's about oversight to make sure everybody's performing the role they were expected to perform in the marketplace. as we look at the reforms that are happening globally around financial markets, there are two areas that we all have to keep an eye on. because at the end of the day, reforms is all about capital flow and capital flow is all about economic and job growth. and the two areas that we have to watch for is one is international consistency, because without consistency, you disrupt the capital flow, and the market works not in silos, but as one process from
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beginning to end. so as the regulators look at the regulations, they need to look at it in one seamless way. >> when you say transparency, what do you think needs to be more transparent? one issue of course was the conflict of interest between the business going on at some of the rating at sis such as what ratings they were coming out with. so that everybody knows where the agenda is for each person? or is there another kind of transparency you're talking about? >> i think there are many elements to trarns pansy. the most important element is to recognize what constitutes a rating and what leads to a rating. so the investors understand that, and understand the assumptions behind those ratings. then it sort of leads you to that. secondly, it is the way you operate. we made changes in the way we do things and added a number of checks and balances. and look, we've operated for # 50 years. our analysts are working and
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have had a great track record for the last two, three decades. clearly in the mortgage-based securities in the last few years, things didn't work and it was a disappointment. but we are trying to address that, and some of the regulatory reforms in bringing transparency is going to help. but the keeping of the transparency is also just not more information is good, but relevant information. because you can easily overload the marketplace with information also. and then the marketplace doesn't get any benefit from that. >> almost like, sure, you want the information, but do you know what to do with that information. >> and is the information relevant for the players that, you know, they know how to use it. >> that's a very good point. how is the securitization market doing right now in your view? >> the securitization market is starting to show some activity. but they have continued to function exactly the way we expected it to. particularly in the area of abs, credit cards, et cetera. it was the mortgage related part
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of the securitization that came to a standstill given the disappointment we saw in the whole housing sector. >> you see a turn? >> not in the housing side of it. >> still very tight? >> but in the credit card and other side of abs securitization, it continues to function quite well. >> great to have you on the program. we appreciate your time today. thank you very much. deven from standard and poor's joining us. the dow industrials and nasdaq composite weaker today. dow down about 61 points. nasdaq composite also down about 14. the slate of earnings that investors are going to be digesting next week.
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welcome back. a handful of big names reported earnings this week. reporting earnings this week, but that's nothing compared to the slew of companies that are going to be featured in earnings central beginning on monday. matt, we're getting into the very heart of earnings season. >> including microsoft. it will be a seattle slew. they're one of the names reporting next week. take a look, bob, at what's
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going on monday. it's going to build a crescendo on thursday. if you look at monday and some of the stocks we'll be paying attention to, we'll look at gannett. the second best performer in the s&p 500 since last reported. up almost 200%. apple's going to be huge after the close monday, as will be texas instruments. texas instruments, the single worst performer of the 13 stocks -- excuse me, over the past 13 weeks in the semiconductor index. on tuesday, we've got five dow components reporting. coke, dupont, pfizer. coca-cola interesting. dupont up 35% year-to-date. interestingly, having its best year in 20 years. pfizer, look for earnings growth there of 43%. yahoo! will come out after the close. wednesday, we've got boeing. we've got morgan stanley. we've got wells fargo and we've
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got amgen. they had a huge pop in july with their breast cancer drug. the stock has been drifting sideways ever since. it will be interesting to see. not a lot of demand out there in a risk appetite environment for some of these health care names. the biotech darling has been performing. ebay to round it out on wednesday. that brings us to the busiest dave of the week. i don't know, but companies love to report on thursdays. mcdonald's is the wild card. we're not positive they're going to report. it says that it's preliminary, but we'll expect that. 3m, merck, at&t as well as travelers. we'll also hear from u.p.s. on thursday and american express will be reporting. jpmorgan's commentary about the problems on credit cards existing for the foreseeable future, could hurt. but also, american express, number one year-to-date on the dow, up 87%. and then lastly, i've got to
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scooch it over here. on friday, as i said, microsoft, before the open, they've never reported before the open. they've always been in after the close. it's rise and shine on friday. get ready to roll. they're three hours earlier than us. that will be a late-night or early morning depending how you look at it. honeywell will also report. it's no longer in the dow. and schlumberger rounds out the week. if you guys want to see in ten seconds, the chart of the week will be the underperformance of the nasdaq over the past five sessions versus the s&p 500. you can see you're down actually .10 of a percent when the s&p 500 is up just about.75%. the real derby in the final five minutes is whether the dow can close above 10,000 or not and give us a psychological lift into the big, busy earnings week. the next two are real blazers. back to you. >> i'll take caterpillar. that will be a good indication
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how international sales are doing. >> so noted. up next, coming right back with the closing countdown. yes, we are. after the bell, join us. will the economy take a hit after the tax cuts expire? is the new administration married to those expiring tax cuts. tim geithner talks to us about higher taxes in the middle of an economic slowdown, in an exclusive interview.
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